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<p>The UK Labour government published its highly anticipated <a href="https://bills.parliament.uk/bills/3737" target="_blank" rel="noopener">Employment Rights Bill 2024</a> (the Bill) in October, meeting its self-imposed deadline to put out new legislation on its <a href="https://labour.org.uk/wp-content/uploads/2024/06/MakeWorkPay.pdf" target="_blank" rel="noopener">Plan To Make Work Pay</a> (the Plan) within its first 100 days of office. The Bill is aimed at strengthening protections for workers and promoting fair employment practices, and has come under criticism in some quarters for its potential cost to businesses. However, it has been noted that the Bill does not appear to be as wide-reaching or immediately effective as the Labour Party’s manifesto implied, and a significant number of proposals have been quietly dropped.</p>
<p>This article explores the most notable changes enacted, proposals that have been left out of the Bill, and developments anticipated in the near future.</p>
<h3>Day-one rights</h3>
<p>Among the government’s most headline-grabbing proposals is a tranche of new day-one rights for workers &#8211; essentially, rights that will be available to workers from the first day of their engagement in employment. Employers will still be allowed to use probationary periods, provided they do not undermine day-one rights, and these day-one rights will replace previous qualifying periods, such as the current two-year qualifying period for unfair dismissal.</p>
<h4>Unfair dismissal</h4>
<p>The government will introduce day-one rights on unfair dismissal and repeal the two-year qualifying period for unfair dismissal claims. The last time this period was amended was under the Conservative-Liberal Democrat coalition government in 2012, when the period was increased from one year to two years. This will give all employees the right to not be unfairly dismissed from the first day of their employment.</p>
<p>However, employers will still be able to dismiss employees for ‘fair’ reasons and operate probationary periods for new hires. The government says it will consult on the details of this policy, including the length of the statutory probation period, which the government is proposing be changed from six months to nine months. During the probationary period, a ‘lighter touch’ process for dismissing employees who are not right for the job will be allowed.</p>
<p>Unfair dismissal reforms will take effect no sooner than autumn 2026 under the current timetable.</p>
<h4>Statutory sick pay</h4>
<p>Statutory sick pay (SSP) provisions will be strengthened by the Bill, with employees eligible for SSP from the first day of sickness absence. The Bill also removes the lower-earnings limit (£123 a week) and three-day waiting period (the first three days of sickness before SSP kicks in), meaning every worker will be entitled to SSP.</p>
<p>There is concern that this change could potentially lead to higher rates of short-term sickness absence, particularly among low-earners who do not currently qualify for this pay</p>
<h4>Statutory paternity, parental and bereavement leave</h4>
<p>Other day-one rights the government will be introducing include rights to paternity leave, parental leave and bereavement leave.</p>
<p>As it stands, paternity and parental leave are subject to 26 weeks and one year’s employment, respectively. The Bill also sees the existing legislation on parental bereavement leave folded into a general entitlement to unpaid bereavement leave. Where bereavement leave concerns a child, leave will be two weeks, and in all other cases, it will be limited to one week.</p>
<p>Another change that has been discussed includes permitting parental leave to be taken in addition to and following shared parental leave, but this is absent from the Bill. It is anticipated that a full review of parental leave will be conducted in the future alongside the provisions in the bill.</p>
<p>It was also initially suggested carer’s leave would be included, but this will be subject to a future review.</p>
<h4>Flexible working</h4>
<p>Since 6 April 2024, employees have been entitled to request flexible working from day one of employment. However, under the new proposals, employers will have to consider these requests and make a reasonable judgment call. Employers should consider responses to flexible working requests seriously, as they may have to convince an employment tribunal (should it come to it) that an employee’s request is unreasonable.</p>
<h3>‘Fire and rehire’</h3>
<p>Before being elected, the new Labour government promised to ‘end the scourges’ of ‘fire and rehire’ practices in its Plan, even where it considers such a process to have happened for a ‘sound business reason’. This is off the back of a number of high-profile incidents of ‘fire and rehire’, such as in the case of <a href="https://www.gov.uk/government/news/government-steps-in-to-prevent-another-po-ferries-scandal-in-major-boost-to-seafarers-rights-at-work" target="_blank" rel="noopener">P&amp;O Ferries</a>.</p>
<p>The Bill proposes to make it automatically unfair to dismiss an employee if they do not agree to a contract variation. However, it does not propose to end ‘fire and hire’ completely.</p>
<p>For example, the Bill has an exception whereby dismissing an employee who does not agree to a variation of their contract is not considered automatically unfair if the employer can show that it was acting in response to financial difficulties that have affected the business’s ability to continue operating as a going concern. This provision also relies on the employer acting fairly in the circumstances and being reasonably unable to avoid making a change to the employee’s contract.</p>
<h3>Zero-hour contracts</h3>
<p>The government has pledged to ban ‘exploitative’ zero-hour contracts, but this is not quite what the Bill proposes. Employees will still be able to remain on zero-hours contracts if they wish, but they will have day-one rights to guaranteed hours that reflect the number of hours they regularly work. The guaranteed hours will be based on a reference period, currently proposed to be 12 weeks.</p>
<p>The exception to this is where work is inherently temporary and where reasonable notice is provided regarding changes to shifts or working time, with appropriate and proportionate compensation provided for cancelled shifts.</p>
<p>While we await further clarification on the finer details of this provision, it remains unclear exactly how this might work in practice. It may render zero-hour contracts so unattractive to employers that they stop employing on these terms.</p>
<p>Alternatively, these changes – specifically regarding the right to a guaranteed number of hours – could inadvertently negatively impact workers by reducing the availability of zero-hour contracts for those who prefer them. We will know more in the coming months.</p>
<h3>Sexual harassment</h3>
<p>As of 24 October 2024, employers have a duty to prevent sexual harassment in the workplace. The Bill seeks to enhance this protection for workers, placing employers under an obligation to take all – rather than some – reasonable steps to prevent sexual harassment in the workplace. It is expected that these ‘reasonable steps’ will be defined by the government in further regulations.</p>
<p>Additionally, employers also have an obligation to prevent third-party harassment of employees during work, and the Bill introduces a new ‘protected disclosure’ category for sexual harassment under the current whistleblowing regime.</p>
<h3>Minimum wage</h3>
<p>The Bill states that the Low Pay Commission will consider the cost of living when deciding the annual rates of the national minimum wage and living wage. Further, the gap between the age band rates will be gradually closed, meaning the same rate will eventually apply to all workers aged 18 and over.</p>
<h3>Trade union reform</h3>
<p>The government intends to reverse many of the measures introduced under the Conservative government that restricted trade unions’ powers and activities. The Bill aims to bolster trade union visibility in the workplace, obliging employers to inform employees of their right to join a trade union and giving unions the right to request access to places of work for recruitment purposes. The government also intends to update the legislative framework underpinning trade unions.</p>
<h3>What is not mentioned in the Bill</h3>
<p>As mentioned above, the government has signposted at various stages and in its Plan other commitments to strengthen workers’ rights. However, not all these commitments were included in the Bill. We anticipate that if these commitments are to be acted on, the government will likely do so through amendments and alternative routes. We outline some of these commitments below.</p>
<h4>The Right to Switch Off</h4>
<p>Before being elected to government, the Labour Party promised in the Plan to ‘bring in the “right to switch off”, so working from home does not become homes turning into 24/7 offices.’ This policy would mean workers would have the right to not engage with work correspondence outside of working hours, bringing the UK closer in line with countries like Ireland and Belgium – countries namechecked in the Plan.</p>
<p>Following the omission of this policy from the government’s Bill, the government published its <a href="https://assets.publishing.service.gov.uk/media/6707a5eb92bb81fcdbe7b62b/next_steps_to_make_work_pay.pdf" target="_blank" rel="noopener">Next Steps</a> document, which indicates that reform on a ‘right to switch off’ will be enacted through a code of practice rather than legislation, obliging employers to draft ‘right to switch off’ policies into contracts. Penalties for non-compliance may therefore be similar to those for failure to follow the ACAS Code. Workers may also have the right to claim additional compensation in a tribunal award (uplifted compensation) if they are repeatedly contacted outside of normal working hours.</p>
<p>However, until full details emerge, we do not know exactly what the policy will look like or the extent to which it will apply.</p>
<h4>The Equality (Race and Disability) Bill</h4>
<p>Although the Bill does include proposals to strengthen protection from workplace harassment, another key pledge the government made on discrimination law – that it would introduce a new Race Equality Act – was not included in the Bill. However, the government’s Next Steps document confirms that the government shall publish and consult on a draft Equality (Race and Disability) Bill.</p>
<p>Currently, claims regarding ‘equal pay’ are based only on the gender pay gap, but this bill seeks to extend the cover of equal pay rights to other protected characteristics under the <a href="https://www.legislation.gov.uk/ukpga/2010/15/contents">Equality Act 2010</a>.</p>
<p>This may not lead to a huge change in practice, as it is possible to bring a claim about pay as an ordinary direct or indirect discrimination claim, but it could lead to a greater awareness of pay gaps outside of gender. Alternatively, it may make the process of bringing claims of discrimination more complicated for employees and employment tribunals.</p>
<h4>A move to a single ‘worker’ status</h4>
<p>One of the bolder proposals in Labour’s initial Plan was to develop a simpler framework for employment status, with a move towards a single ‘worker’ status, aimed at protecting and improving the rights of workers in the gig economy and other non-traditional forms of employment. Such a policy would mean that all ‘workers’, regardless of their employment status, would be granted a fixed set of core rights and protections.</p>
<p>This commitment has been moved to a ‘Wider reforms’ section in the government’s Next Steps document, with a plan for consultation at a later date.</p>
<h4>Surveillance technologies in the workplace</h4>
<p>Another pledge moved to the ‘Wider reforms’ section of the government’s Next Steps document is a pledge to consult on workplace surveillance technologies. This is to address privacy concerns and ethical considerations around the monitoring of employees in the workplace.</p>
<h3>What happens next?</h3>
<p>The Bill is due for its third reading, having had a second reading in the House of Commons on 21 October 2024. At over 150 pages in length and containing 28 employment measures, the scope of the Bill should not be underestimated, and it has faced criticism regarding its scope and potential economic impact. Estimates at the higher end of the scale have suggested a cost to employers of <a href="https://www.bbc.co.uk/news/articles/cvgdgx8vze8o" target="_blank" rel="noopener">£5 billion each year</a>, and the Regulatory Policy Committee has labelled eight of the legislation’s impact assessments <a href="https://www.gov.uk/government/publications/employment-rights-bill-rpc-opinion-red-rated#:~:text=The%20RPC%20has%20assessed%20as,'not%20fit%20for%20purpose'." target="_blank" rel="noopener">‘not fit for purpose’</a>.</p>
<p>In response to this, the government has indicated a desire to compromise, aiming to balance worker protection with economic growth, and a lot of detail surrounding the Bill has been left to consultation and secondary legislation. As such, the full extent of the Bill may not be apparent until later in this Parliament’s lifetime, with a consultation on the Bill due later on in 2025 and many reforms not expected until 2026.</p>
<p>To learn how Linnear Legal can support your business through these changes, <a href="https://www.linnearlegal.co.uk/get-in-touch/">contact us today</a> for tailored legal advice on <a href="https://www.linnearlegal.co.uk/employment/">employment law</a> and comprehensive compliance solutions.</p>


Labour's new Employment Rights Bill

Learn about what the UK government's Employment Rights Bill 2024 means for businesses and when those changes will take effect.

Labour's new Employment Rights Bill | Linnear Legal

Labour&#8217;s new Employment Rights Bill

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